Standing Committee A

[Mr. Jimmy Hood in the Chair]

Tax Credits Bill

Jimmy Hood: It is a little warm in the Room so if members of the Committee feel uncomfortable, they have my permission to remove their jackets.

Dawn Primarolo: I beg to move,
That— 
 (1) during proceedings on the Tax Credits Bill the Standing Committee do meet on Tuesdays at half-past Ten o'clock and at half-past Four o'clock and on Thursdays at half-past Nine o'clock and at half-past Two o'clock; 
 (2) the proceedings shall be taken in the following order, namely Clauses 1 to 26, Schedule 1, Clauses 27 to 32, Schedule 2, Clauses 33 to 43, Schedule 3, Clause 44, New Clauses and New Schedules relating to Part 1, Clauses 45 to 47, Schedule 4, Clauses 48 to 53, New Clauses and New Schedules relating to Part 2, Clauses 54 and 55, Schedule 5, Clause 56, Schedule 6, Clauses 57 to 65 and remaining New Clauses and New Schedules; 
 (3) the proceedings on Clauses 1 to 22 (so far as not previously concluded) shall be brought to a conclusion at 5 pm on Thursday 17th January 2002; 
 (4) the proceedings on Clauses 23 to 26, Schedule 1, Clauses 27 to 32, Schedule 2, Clauses 33 to 43, Schedule 3, Clause 44 and New Clauses and New Schedules relating to Part 1 (so far as not previously concluded) shall be brought to a conclusion at 11.25 am on Thursday 24th January 2002; 
 (5) the remaining proceedings on the Bill (so far as not previously concluded) shall be brought to a conclusion at 5 pm on Thursday 24th January 2002.
 Good morning, Mr. Hood, and welcome to the Committee. I am pleased that you will chair our deliberations and that you will get our consideration off to a good and businesslike start. I am sure that our debates will be constructive and sensible. The programme resolution was agreed yesterday by the Programming Sub-Committee. The end date of our discussions has been agreed as 24 January, as set by the programme motion passed by the House of Commons on 10 December. 
 The Bill is in three parts. Part 1 introduces the child tax credit and the working tax credit in place of existing systems of support. Part 2 transfers responsibility for administering child benefit to the Inland Revenue, as announced by the Prime Minister in June 2001. It also makes some minor technical changes to the law on child benefit to facilitate smoother integration. Part 3 makes supplementary provisions. 
 The programme resolution would allow the Committee to spend the bulk of its time considering part 1, which is the longest part of the Bill. It deals with the most significant reforms that the Government are undertaking and will be of interest to members of the Committee. 
 I am aware of suggestions that the official Opposition want to frustrate the progress of Bills that are being discussed in Committee, but I am 
 confident that the hon. Member for Arundel and South Downs (Mr. Flight)—whom I welcome to the Committee—will, with the support of his hon. Friends and the hon. Member for Northavon (Mr. Webb), want to ensure that the Bill is scrutinised properly. I hope that members of the Committee will agree that our proposals are sensible. I ask them to support the motion.

Howard Flight: Welcome to the Chair, Mr. Hood. I am sure that our debates will be effective. I assure the Paymaster General that we have no intention to filibuster, but we feel quite genuinely that eight sittings will be wholly inadequate for such a major Bill. I question the Government's wisdom in introducing it at a stage at which obviously they have not made up their mind about expenditure and what they want.
 The Minister may know that the Institute of Fiscal Studies considers that the consultation process was a scandal; some original papers that contained illustrative figures have since disappeared, and the consultation document did not cover all the issues. We are about to discuss a framework Bill in which the Government may make regulations in respect of many key areas—a phrase that we have come not to love. Such a process is not democratic, given the changes that will be made under the Bill. 
 The Minister may be aware that a Select Committee considered tax credits under the Heath Government and issued an important minority report. When the Labour party won the 1974 election, Chancellor Healey said that the Government believed that there were serious drawbacks to the tax credit scheme described in the minority report. The drawbacks highlighted were that there was insufficient flexibility, particularly for those most in need, and that the majority of the expenditure would benefit those who were not in poverty. Costs were too great when measured against benefits, particularly for those most in need, and there was concern, even then, about the increasing scope for fraud. It was suggested that the Select Committee should stop ill-considered and ill-worked-out solutions of tax reform before the then Government were rushed on to the legislative conveyor belt. 
 Today, we are to be rushed on to an inadequate legislative conveyor belt even though many major issues are still unresolved, particularly that of what expenditure and benefits are intended. We oppose the programming motion because it does not allow us to do a proper job of critiquing the Bill. We shall do our best to ensure that the most important clauses are dealt with, particularly those late in the Bill that deal with fraud. 
 Perhaps the most important issue, which was raised by the right hon. Member for Birkenhead (Mr. Field), is that the Bill threatens to open up enormous new scope for fraud just after the Government have set in motion measures to reduce social security fraud. Those measures are being torn up under the Bill. We shall endeavour to discuss those passages, although that may mean sacrificing others. It is a great pity not to allow sufficient time to discuss important new measures, particularly as the consultation process has 
 been inadequate, as evinced by the comments of many charities, other bodies, lawyers and specialists.

Steve Webb: Thank you, Mr. Hood, and welcome to the Chair. This is the first time that I have had the privilege of serving under your chairmanship, and I hope it is the first of many.
 On the programming resolution, two weeks is clearly an inadequate time in which to discuss the Bill. When I queried the two-week time allocation, I was told that the Bill was not contentious and that no one had voted against it on Second Reading. However, that does not mean that it is not a complicated Bill, and that proper scrutiny would not benefit the people who will receive the tax credits. That is regrettable. 
 When the House passed the programming resolution, which indicated that debate would finish on Thursday next week, it did not mention when debate would start. If hon. Members had realised that it would not start until two weeks before that date, they might have voted differently. However, those are the circumstances, and I shall not take up the Committee's time by saying that we do not have enough time. We should get on with it. 
 My only query about the programme motion is that the second cut-off point mentioned in paragraph (4) is 11.25 am on Thursday next week. We have told the Government that we are concerned that that gives us more time than we might need on the last clauses of the Bill, which, although worth while, are uncontentious, and less time on earlier, more contentious passages. I hope that we can keep that under review.

Dawn Primarolo: The hon. Member for Arundel and South Downs made a point about the consultation. Responses to the consultation show that the Government, when developing their proposals, worked closely with outside organisations that were particularly interested in the subject. That can be seen in the summary of the responses, which, for those who are interested, can be found in the Library. Although the Institute for Fiscal Studies had something to say about the cost, and although groups are, of course, interested in the rates and tapers—they will be announced by my right hon. Friend the Chancellor of the Exchequer in the Budget—there has been extensive consultation on the framework.
 The hon. Gentleman's second point was about a Select Committee in 1974. I will not guess the hon. Gentleman's age in 1974, but, I was considerably younger than I am now, and the world has moved on. [Interruption.] I am grateful to the hon. Member for Mid-Worcestershire (Mr. Luff) who continues to give me such sterling support from the Opposition Benches. The hon. Gentleman will help my general well-being in the Committee, if not my votes. 
 Points were made about the flexibility and certainty of the structure, about fraud and about transparency and accessibility. Those matters are the substance of the Bill. I hesitate to tell the hon. Member for Arundel and South Downs once again that the world has moved on since 1974. We all know much more and we may find solutions to problems that could not be solved at that time. 
 The hon. Member for Northavon made a point that he has made previously about the programme motion. He asked how much time would be permitted to consider the end of the Bill, which he believes to be less contentious. We should see how we progress. If the Committee decides that it wants to shorten consideration of the end of the Bill to allow more time to consider other parts, we can reconvene the Programming Sub-Committee. If the Opposition agree that they wish to do that, I am relaxed about that. I am concerned about finishing our consideration by 24 January, and I want to aid the Committee as much as possible before that date to allow us to concentrate on the parts of the Bill that the Opposition particularly want to discuss. 
 With that indication of how our future business could be adjusted if we make progress, we should turn to the Bill. I hope that the Committee will agree to the programme motion. 
 Question put:—
The Committee divided: Ayes 8, Noes 7.

Question accordingly agreed to.

Clause 1 - Introductory

Steve Webb: I beg to move amendment No. 63, in, page 1, line 7, at end insert—
'(1A) The child tax credit shall be a family benefit for the purposes of Council Regulation (EEC) No. 1408/71.'.
 I hope that the brief amendment will not detain the Committee long. We must consider the status of the tax credits in the Bill under existing domestic law and European law. European law makes provision for a category of benefits known as family benefits to be treated in a particular way for people who work in one country and have children in another. 
 The critical element is the European Community regulation 1408/71, as I am sure the Committee will know. The two issues are whether the person comes within its scope, and whether the benefit comes within its scope. A person is covered by the regulation if he is liable to pay social insurance in one or more member states of the European Union and has exercised free movement. We are, therefore, discussing people who move to obtain work in the EU. They may be covered by the provisions if the regulation classifies the benefit as a family benefit. Clearly, the family credit used to be treated in such a way, as did the working families tax credit, which was a renaming of the family credit. That has now been split into an adult part and a child part, and the amendment is designed to make it clear whether the child part, at least, will be categorised as a 
 family benefit. We believe, and consistency demands, that it should. I hope that the Minister will accept the amendment.

Howard Flight: The Conservatives have raised the same issue in subsequent amendments that relate to the EU. Clarity is needed both in regard to EU nationals and, possibly, Commonwealth nationals who may be resident here, on which clause 51 touches. What is the Government's policy?

Dawn Primarolo: This is a very specific amendment, which I shall treat as a probing amendment. I can answer the hon. Gentleman's question, but it is not necessary for the Bill to be amended, because the provision exists anyway. The amendment is not appropriate, and if the hon. Member for Northavon were to press it to a Division, I would have to ask the Committee to oppose it.
 Such provisions do not need to be included in a Bill. The European regulation to which the hon. Member for Northavon refers is, rightly, directly applicable, and it is not necessary to transpose the provisions in that regulation into domestic law. It would be much better, and it would make for a better Bill, if the hon. Member for Northavon were to withdraw his amendment. 
 The hon. Member for Northavon asks for clarification about how European social security law within the regulation will treat the new tax credits. A small caveat is necessary. The field is complex and evolving, and the precise treatment of the tax credits under European law may depend on some of the detailed aspects in the final design, which we are considering carefully. Our provisional view is that, as the hon. Member for Northavon said, family credit, and working families tax credit, was, like child benefit, considered to be a family benefit under the regulations. We therefore believe that the child tax credit will fall within the family benefit. 
 We believe that the working tax credit will fall outside the scope of the main co-ordinating instrument to which the hon. Member for Northavon referred in European law. As we conclude the Bill, we shall be able to take a view on that. However, that is our provisional view, and that will happen automatically. That implies treatments under European law, which I shall not discuss now, as later amendments relate to those issues. 
 I hope that my explanation has been clear and that the hon. Member for Northavon will agree that the amendment is unnecessary. It is clear and on the record which credits, under the regulations to which he refers, will be designated a family benefit and why the working tax credit would not.

Steve Webb: I am grateful to the Minister for the constructive way in which she has begun, which I am sure will continue, and for placing on record the Government's provisional view that the child tax credit element will be regarded as a family benefit, subject to the fine print and details. Having received
 that assurance, I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn.

Howard Flight: I beg to move amendment No. 1, in page 1, line 15, leave out paragraph (d).

Jimmy Hood: With this it will be convenient to take amendment No. 2, in page 1, line 20, leave out paragraph (e).

Howard Flight: Clause 1 brings to an end three benefits that are not work related. It is our understanding that the working tax credits are intended to focus on work circumstances and people in work, thereby, in the main, leaving the Department for Work and Pensions to administer benefits for those not in work. In principle, it is not sensible that certain benefits that are not related to work should be administered by the Inland Revenue, rather than by the DWP, which will be administering other benefits for those not in work.
 This is a probing amendment. We wish the Government to explain why this policy is being pursued. We are concerned because the working tax credits are to be delivered through bank accounts, and that will depend on the universal bank being fully operative by April 2003, which looks a little doubtful. People who are not in work are most in need of benefits, and therefore it is important that there should not be any problems with the delivery of these benefits. 
 In some regards, amendment No. 49, which has been tabled by the Liberal Democrats, addresses the same issue as I am raising. I want the Minister to explain what will replace these benefits, and to state whether it is Government policy to end them. 
 The amendment pertains to that point because the benefits covered by clause 1(3)(e) are the extra non-means-tested benefits for children that accompany incapacity benefit, invalid care allowance, severe disablement allowance and widowed mothers and parents allowance, and which amount, at present, to £11.35 per week. The clause does not make it clear whether the new arrangements are going to replace those benefits, and if that is to be the case, whether they will do so in whole or in part. Can the Government confirm that nobody will be worse off? There are 630,000 recipients of those benefits, and I have received information from the Library that suggests that about 150,000 of them will lose their £11.35 per week. If that is the case, the Government's consultation document might have stated more openly that this was their policy and intent. 
 I wish the Minister to confirm that I have correctly understood that, and to explain what—if anything—will replace those extra non-means-tested benefits. I understand that, technically, people will not be able to claim child dependency increases if the Bill is enacted. It will not have a financial impact on someone whose income is sufficiently low to qualify for means-tested benefits, but 150,000 people whose income is not sufficiently low will lose out.

Steve Webb: When I first read amendment No. 1, I could not see the point of it. The Bill is intended to sweep away existing systems of support for children and to roll them into an integrated system—which is
 why we did not oppose it on Second Reading. Therefore, clause 1(3)(d) is essential; it is designed to get rid of the separate systems, and to roll them into one.
 I do not support amendment No. 1 for that reason, but I agree with the hon. Gentleman's suggestion that it should be viewed as a probing amendment to explore what the Government have in mind with regard to the transition. 
 At present, someone who receives a contributory benefit that is in excess of the adult rates of income support but less than the combined adult and children rate would receive income support to bring them up to the poverty line. Once the adult and children elements are separated, someone whose contributory benefit is in excess of the adult element will not receive any income support, but they will receive some payment of child tax credit. 
 The Committee will want to know how procedures such as passporting will operate under that sort of arrangement. Income support is a passport to 100 per cent. housing benefit. If someone has a contributory benefit that takes them out of income support under the split system, will they still receive 100 per cent. housing benefit? If that will be the case, how will that operate? That is not clear. Similar questions arise with, for example, passports to free school meals. Therefore, as the hon. Member for Arundel and South Downs has suggested, amendment No. 1 should be viewed as a probing amendment that gives the Committee a chance to raise such questions. 
 Amendment No. 2 should be viewed differently from that. It addresses the transition for people who are currently receiving the benefits that are referred to in subsection (3)(e). There is also an issue surrounding whether new claimants should receive those benefits. A typical case might be someone on incapacity benefit, who is receiving contributory benefit above basic adult means-tested benefit rates, and therefore would not move over to integrated benefits in full, but would get a partial, or, potentially, a nil rate of child credit. The total amount of support going to those families would therefore fall, or would be lower than it would have been without this element of the Bill. Given the Government's proper objective of halving then abolishing child poverty, people on relatively modest incomes will lose out from clause 1(3)(e). People on incapacity benefit, sick people, widowed mothers and others will be made worse off by the provision. That seems to go against the Government's stated aim of reducing child poverty. Those people will not necessarily be fully compensated through integrated benefits, which is why the Conservative party and the TUC—strange bedfellows—were concerned about the measure.

Dawn Primarolo: The amendments touch on several complex points, which have been addressed in the debate. First, a point was made about entitlement to dependency increases. Secondly, the issue of floating off income support was raised. Thirdly, the question of passporting—whereby income support triggers an automatic transfer to other benefits—was raised.
 On the first point, the amendments would prevent the abolition of child and family premiums within income support and income-based jobseeker's allowance, as well as child dependency increases. That is contrary to the principle that the Government are rightly pursuing, and which the hon. Member for Northavon identified, of developing the child tax credit, which provides a continued stream of support to families with children, regardless of whether the parents are in or out of work. We intend the child tax credit to replace the child and family premiums within income support and jobseeker's allowance, as well as increases for some children in some other benefits. We are trying to streamline the system to make it more transparent. Individuals and couples who are out of work will continue to receive the adult element. We are therefore leaving in place the adult elements, which are determined by being in or out of work, but putting all of the child premiums into the child tax credit. 
 For example, if someone is unemployed and in receipt of jobseeker's allowance, his or her jobseeker's allowance would comprise the adult elements only of jobseeker's allowance for that household, but they would be transferred to the maximum child tax credit. As hon. Members will recognise, we have raised income support levels of child premiums significantly—by 70 per cent.—over a period of time.

Mark Hoban: Will the Paymaster General give way?

Dawn Primarolo: When I have finished this point, I shall give way to the hon. Gentleman.
 In a household that is in receipt of income support or jobseeker's allowance, income for adults would be from income support or jobseeker's allowance. For the children, the child tax credit would be provided, regardless of whether the parents are in or out of work, thereby removing the stigma and recognising the Government's objective to tackle child poverty. We have therefore moved the relevant allowances. It would be bizarre to remove the stigma in relation to being in and out of work, but to return to the system whereby all child premiums are within income support or JSA.

Mark Hoban: The Minister referred to two streams of income in relation to people who are unemployed—the adult element of jobseeker's allowance and child tax credits. Will people who are unemployed receive two separate payments or just one, and with what frequency will the payments be made?
Mr. Flight rose—

Dawn Primarolo: I shall give way to the hon. Gentleman before I answer that point because that is the procedure.

Howard Flight: Further to that point, will claimants need to go to two separate portals: the Inland Revenue for the child part, and the Department for Work and Pensions for the adult part?

Dawn Primarolo: The intention is that individuals will apply directly through the Jobcentre Plus offices. They would make one application at that point, which
 would trigger income support or JSA payments to adults and, if they have children, it would also trigger child tax credit payments. Those individuals would receive two separate payments because child tax credit is paid directly to the main carer, as is child benefit. In the case of income support or JSA, it is conceivable that that payment would not go to the main carer. When we debate later clauses, we will see the crucial importance of paying to the main carer as part of the Government's anti-poverty strategy. We reject the amendment because it would leave in place the current system for those out of work, which undermines the principle of the children's tax credit.
 I would like to comment on dependency increases, and then move on to the question of those who may float off income support. I am sure that the hon. Members do not intend the actual outcome of their amendments, which would leave the current system in place for those unemployed. The introduction of the new credit will rationalise the Government's financed income streams for children. Families' needs have changed over the years, particularly since the child dependency increase was introduced. I remind Conservative Members that the Social Security Administration Act 1992 provided for the withering on the vine of child dependency increases, which reduce in line with increases in child benefit. I know that the previous Government did not like child benefit, and did not increase it much, but our Government do not agree. We perceive child benefit as being important and increased it by 26 per cent. in the previous Parliament. 
 Because families' needs have changed, we must make the new system easier to understand. If we make the system more transparent by integrating provisions for families in and out of work, it would seem odd to perpetuate the distinction between families receiving contributory benefits and those who are not. That would simply cut the same problem a different way. The value of child dependency increases has diminished and existing social security legislation allows for them to reduce, although payments are still made. Rather than allowing dependency increases to run out of the system as child benefits increase, we have considered families' real needs and supported them in a more strategic way. Most families who receive child dependency increases will benefit financially from the new tax credits, particularly those on low incomes. I know that Conservative Members will say that we cannot settle that precisely until the thresholds and tapers are determined. That is true for the whole population. However, that group will be financially better off. Approximately half the families with child dependency increases cannot receive income support or jobseeker's allowance, as they have other income but are not in work. Their extra income will be generated when the child tax credit is introduced. 
 We recognise that such families are used to the current system. Changes to benefits can be disruptive to family budgeting. We therefore want to make the transition from the CDIs to the child tax credit as 
 smooth as possible. That is why we propose to preserve the entitlement for existing recipients. It is always an issue when one benefit replaces another. When the transition is complete, those who already have the entitlement will be in a better position.

Hugo Swire: Does the Minister have any idea how long the transition will take?

Dawn Primarolo: I know the answer to that question. It will come to me in a moment of inspiration, and I will return to it. Before the hon. Gentleman intervened, I was discussing the position of those who may float off income support, but he should prompt me if I do not give an answer.
 The issues are complex. The Government seek to assist people who receive benefits. The child tax credit will ensure that there is no loss. There will be considerable benefit for some, and we are consulting on how we manage that transition. It is important that all those who will be affected know what the changes are, are kept informed as the changes are gradually made, and are fully aware of their position vis-a-vis their benefit entitlement. I have learned as a Minister that when people are used to budgeting in a particular way, they still have to make the transition even though what they are moving to may be better. We are attempting to address that issue by introducing the child tax credit.

James Clappison: The Minister has not yet answered the question, which several hon. Members have asked her, about those who become entitled to a child dependency increase, for example by becoming entitled to incapacity or other benefits. Will some people who would have received the child dependency increase if the present system had continued, not be entitled to the child tax credit?

Dawn Primarolo: I will first answer the question from the hon. Member for East Devon (Mr. Swire). The answer is obvious and I wish that I had realised that. Because it tapers away, the transition lasts for as long as it takes the increase in child benefit to reduce and cancel the child dependency income. One cannot say that the transition will last for five, six or seven years, as it depends on the interaction with the provisions that were introduced in 1992 by the Conservative Government. As child benefit increases, the child dependency allowance goes down.
 With regard to the intervention made by the hon. Member for Hertsmere (Mr. Clappison), some people who receive child dependency increases are not entitled to income support, but will receive more from the child tax credit. Such people are not entitled to income support because they may have other forms of income. 
 When we discuss other clauses it will become clear that, because of the way that child tax credit is structured, it lasts longer. That would be true even if the tapers were the same as those of working families tax credit, because those tapers are lower. Obviously, all those who currently receive such benefit would continue to do so. Provision for industrial injuries and war pensions are dealt with under separate legislation that we do not consider it appropriate to remove at this time. Those are different types of payment. They are more about compensation than social security and 
 would therefore be treated separately. I agree with the child dependence increases, and hope that I have made what is a complex area as clear as possible. 
 There is also the issue of people who will float off income support. When child tax credit creates an income for the family—either in its own right or with other income—it could possibly take a person beyond income support levels. The hon. Member for Hertsmere will understand that I do not want to go down that route at the moment, because the issue will depend on thresholds and tapers. 
 That leads to passporting. Because the working families tax credit was far more generous, we were unable to use the credit payment as the flag for passporting. We worked out a value that protected all those who were in receipt of passporting at that time. We are discussing how to make passporting work in the simplest way within the new tax credit system—it is complicated because there are many issues, whether it is milk or more straightforward matters such as prescriptions—given that the new tax credit will support families further up the income scale when automatic passporting would not be appropriate. We want to protect the position of those on income support. Passporting issues have more to do with those who are higher up the income scale and we have to decide on an appropriate figure at which to put the flag. That is a matter that, as I said, we are discussing with several Departments.

Steve Webb: I am grateful to the Minister for giving way. She said the Government intend to preserve passporting for those on income support. Will that include people who floated off income support? Given the way that such matters are split, under the present system, income support would remain subject to passporting. Is that what the Government is trying achieve? Would a person who is entitled to income support under the present system still receive 100 per cent. housing benefit and the passports, regardless of the mechanism by which they receive money under the new system?

Dawn Primarolo: I do not wish to mislead the Committee, but nor do I want to put doubt in the minds of hon. Gentlemen about our intention. We want to ensure that the appropriate packages of support are provided for those families in greatest need and for families that are eligible for them. To achieve that, we have to discuss the issues with other Government Departments. For example, the Department for Education and Skills has proposed an amendment to the Education Bill to allow an entitlement for free school meals to be attached to appropriate criteria within the new tax credit. That is under discussion. It is a highly complex matter and we shall have the opportunity to return to it in Committee and during later stages of the Bill. At present, the Government expect to be able to give a clear explanation before we finish our proceedings in Committee, as hon. Members discussing the Bill on the Floor of the House and those the other place will need to know such details.
 I have tried to deal with these complex issues in as straightforward a manner as I can. If amendments Nos. 1 and 2 are not withdrawn, I shall ask the Committee to oppose them. Amendment No. 1 would undermine the principle of there being a continuous stream to the family. I hope that I have clarified how that will work and that I have demonstrated that there will be a suitable transition, particularly for the child dependency increases. 
 Passporting is being addressed. Obviously the Committee will return to the matter, and I hope to be in the position to give some answers. However, I cannot make any promises at the moment. People think that Treasury Ministers are all-powerful, but we have to discuss and negotiate with other Departments. It would be improper for me to say something now without having made it clear that my colleagues in other Departments support my views. I have explained the position as delicately as I can. I hope that the Committee considers that I have been as helpful as possible so far and that the hon. Gentleman will withdraw the amendment.

Steve Webb: I am grateful to the Minister for the clarification that she was able to give. She said that the precedent in respect of passporting when a benefit system changes was the use of a cash sum to replace a passport to benefit. I hope that the Government are not about to replace benefits with cash sums, whenever possible. For example, I hope that a cash sum will not be given instead of free school meals. I wish to place on record my concern if the Government were to go down that route.
 Amendment No. 1 has enabled the Committee to probe into the matter, so I shall not pursue it. The background to amendment No. 2 still worries me, however, because the Minister has not said that there will not be families who will worse off as a result of the abolition of child dependency increases. I accept her point about transition, but because of the abolition of increases under subsection (3)(e), new claimants will not receive additions to their capacity benefit nor full recompense. They will be worse off and will set back the Government's goal of reducing child poverty. I still consider that amendment No. 2 raises some important issues.

Howard Flight: I thank the Minister for her response to amendment No. 1, with which we are satisfied. We are pleased to note the Government's conversion to our argument to pay benefits to the carer.
 I am not satisfied with hon. Lady's response to amendment No. 2. I refer first to a legal point. The Government said in the regulatory impact assessment to the Bill that they would continue the benefits under clause 1(3)(e) to those who receive them at present. However, those benefits are to be abolished by the Bill, so how can people legally continue to receive benefits that have been abolished? 
 Secondly—I echo the comments of my hon. Friend the Member for Hertsmere—the Minister said that, unless the incomes of new claimants are low enough to qualify for means-tested benefits, those just above that level will be £11.35 lighter. If not, will the Minister 
 make it clear that the Government intend that people will not be worse off under the complex new arrangements? 
 On passporting, I confess that I was not fully clear about what the Paymaster General was saying. However, it seemed that the same point obtained—for those who are on income support, there would be no change in passported benefits, but if their income was not low enough, they might be worse off. Whether or not we press amendment No. 2 to a vote depends on a clear understanding as to whether people will be worse off under the new arrangements in relation to CDIs and passporting.

Dawn Primarolo: In response to the hon. Member for Northavon, I was not referring to replacing benefit with cash. As working families tax credit is more generous, I was commenting on the fact that, instead of just flagging up that those in receipt of it will be passported on to other benefits, we set a cash point—£12,000, I think, although I cannot remember the precise figure. That ensured that everybody who was passported remained passported if they had had an extra gain, but not if their income level was such that that would be inappropriate.
 On the points made by the hon. Member for Arundel and South Downs, I explained that, in relation to those who are already in receipt of benefit, with the exception of the two benefits that I identified, the process that has been going on since 1992 will continue: provision will reduce as child benefit increases. On new claims from 2003—this is subject to decisions on rates—we would expect most families who were previously eligible for CDI to receive a more substantial tax credit award, with the exception of families who are already enjoying relatively high incomes, or those who are living overseas. That caveat is working its way through the system. 
 On replacement of CDIs, the child tax credit will become available to many families who do not fulfil the qualification conditions for income support or JSA, or, currently, for working families tax credit. That is a further boost. The general extension will therefore benefit many families who are currently receiving non-means-tested benefits. Tax credit rates will be determined by the Budget process, and, within those constraints, I am trying to give the Committee the strongest steer that I can. 
 The final point made by the hon. Member for Arundel and South Downs was on the transitional arrangement. I understand the legal point about whether it will work, but the regulations will spell out the way in which it will operate. I am advised confidently that that is correct, and that we can continue with the provisions. I therefore ask the Committee to oppose the amendments if they are pressed to the vote.

Howard Flight: I repeat that we are satisfied regarding amendment No. 1. On amendment No. 2, I am sure that the Minister said that although many people will be better off, some will lose out and some will lose
 altogether. If that is the case, the amendment should be pressed.
 I forget the technicalities of the procedure. May we vote on amendment No. 2 but not amendment No. 1?

Jimmy Hood: The hon. Gentleman may forget the technicalities, but the Chairman cannot. May I guide the Committee? If the hon. Gentleman wishes to withdraw amendment No. 1 and press amendment No. 2, I will allow a vote on amendment No. 2. However, he must withdraw amendment No. 1.

Howard Flight: I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn. 
 Amendment proposed: No. 2, in page 1, line 20, leave out paragraph (e).—[Mr. Flight.] 
 Question put, That the amendment be made:—
The Committee divided: Ayes 7, Noes 8.

Question accordingly negatived. 
 Clause 1 ordered to stand part of the Bill.

Clause 2 - Functions of board

Howard Flight: I beg to move amendment No. 3, in page 2, line 9, leave out subsection (2).
 As the Committee is aware, the clause brings the management of the new tax credits under the Inland Revenue and confers the same management discretion that the Inland Revenue has on other matters. Does that mean that the Inland Revenue will have greater discretion generally than the Department for Work and Pensions with respect to social security benefits? 
 The real point addressed by amendment No. 3 is that the primary objective of the arrangement is to cook the nation's accounting books. In the back of the Bill's explanatory notes, it is pointed out that a further £4 billion of the existing child-related expenditure and jobseeker's allowance expenditure of the Department for Work and Pensions will be transferred to be booked as a reduction in tax revenue rather than expenditure. If benefit levels are as anticipated to ensure that nobody is worse off, there will be a further £2.8 billion of expenditure. That will bring the total welfare expenditure that is netted of tax revenues rather than booked as expenditure to £15 billion. That is a substantial distortion of national accounting. 
 Will the national accounts—the Red Book—show that expenditure clearly, or will it appear as only netted of tax revenue? How did the Government satisfy themselves that the arrangements are not in 
 breach of section 95 of the European standards of accounting? 
 The Minister responded to an amendment tabled by the Liberal Democrats to say that one particular benefit definitely will be cast as a family benefit. If the Government argue that we are discussing tax measures rather than welfare measures, how can they have their cake and eat it on the European Union requirements?

Steve Webb: I was startled by the hon. Gentleman's brevity.
 With regard to amendment No. 3, and the issue of whether these tax credits should be regarded as negative tax revenues rather than as social security benefits, it is clear that a part of them offsets a tax liability. Therefore, regardless of whether they are listed as a reduced payment of income tax—on a pay slip, for instance—or as two separate entries, there is a meaningful sense in which they are tax credits, as they reduce someone's net tax liability. 
 However, some part of the expenditure that is being dealt with in this part of the Bill does not do that. If a family's tax liability is smaller than its combined tax credits entitlement, it is hard to see how the part of its tax credit entitlement that does not merely offset its tax liability but goes below zero—thereby exceeding its tax liability—can be regarded as a negative income tax yield rather than a social security payment. 
 I want the Minister to inform the Committee, either now or in writing—or in another way—about the breakdown of the total expenditure on tax credit, so that we can draw a comparison between the part that offsets people's income tax liabilities, and the part that takes them beyond zero and, therefore, is really only a social security benefit payment. I have no feel for whether that comparison will reveal a figure such as a quarter, a half—or whatever—and it would be helpful if the Minister could inform us. If most of the tax credit money is offsetting tax liabilities, it makes a certain amount of sense to regard it as negative income tax, but if only a small part of it is doing that, and most of it is taking people well beyond zero, it should be regarded as benefit.

Dawn Primarolo: As the hon. Gentlemen who have spoken to it have said, the amendment seeks to explore the Government's thinking behind the funding for and accounting of the new tax credits.
 Unfortunately, the amendment removes the provision for allowing tax credits to be funded from tax receipts, but does not provide for alternative funding. Therefore, it deletes all the credits, which—I am sure the hon. Gentlemen will be unsurprised to hear—I would not welcome. I mention that because it is a probing amendment, and I am sure that it will not be pressed to a Division, but if it were, I would ask my hon. Friends to oppose it. 
 The key issues are the interaction between the Red Book and national accounts, and transparency. 
 I am unsure whether I can immediately answer the question that has been asked by the hon. Member for Northavon, but I undertake to investigate the matter, 
 and to write to him. However, in my remarks, I will bear his question in mind, and try to address it. 
 With regard to the question about the accounting, the Government's position is clear and consistent. The tax credits are part of the tax system and, as such, they are administered by the Inland Revenue. They are designed to balance the contribution that families make through tax and national insurance with their financial needs. That is what the Inland Revenue is doing. 
 The tax credits provide a way for the tax system to take account of the circumstances and responsibilities of a family or a household during a tax year. Therefore, it is proper that the new tax credits should be funded from tax receipts: the working families tax credit and the disabled person's tax credit were funded in that way, as was the children's tax credit, which is essentially a relief. 
 Funding tax credits from tax receipts accurately reflects what actually happens. For the Government, the cost of the tax credits interacts directly with the Chancellor's other tax proposals, and it affects the net taxed receipts that are available to fund our programme. 
 The way in which the employers deal with tax credits precisely follows the treatment provided in clause 2(2). Through PAYE, employers withhold tax and national insurance contributions from their employees' wages. From that pool of money, they pay their employees' tax credits, with the caveat that if the figure that they pay out is larger than that which they receive, they can apply for a direct grant in advance to help them with their cash flow.

Mark Hoban: The Minister's logic works, although I wholly disagree with it. As an accountant, I advise many clients against netting off, and that is what we are doing under this system. I do not agree with her argument.
 Someone who is unemployed may receive the child tax credit, and because he or she qualifies for the jobseeker's allowance, or income support, he or she does not pay any tax. The Minister uses an argument based on the way in which employers administer their payrolls and applies it to the tax benefits paid to someone who is not in work. That would be a benefit, not a tax credit.

Dawn Primarolo: I got the hon. Gentleman's point. My explanation was logical when applied to the working tax credit, but not when applied to the child tax credit, which is paid straight to the carer. It would be nonsense for the child tax credit to be paid differently simply because it did not go through the employer. That would take us away from the principle towards which we are moving. The system makes sense and there are precedents for it. I was interested to hear that the hon. Gentleman was an accountant. I am sure that he is not against the way in which value added tax operates—it nets off. That principle applies within the system.
 We have moved away from how DWP treats its expenditure, and how Inland Revenue will account for that expenditure.

Howard Flight: I wish to respond to the point made by my hon. Friend the Member for Fareham, and to get to the heart of the issue. The overlap between those receiving benefits and those paying tax is not a good one. That is why reducing the tax paid is a problem. The Minister will find that the overlap is, at most, 40 per cent. in aggregate. The intellectual argument can be made that 40 per cent. is a refund of tax, but 60 per cent. is not.

Dawn Primarolo: Perhaps I could move on to how the Inland Revenue will account for its expenditure, and how it differs from DWP. That may well assist us in our discussions.
 Subsection (5) requires Inland Revenue to set forth accounts for the tax credits and to distinguish between the amounts of each tax credit. That is a more rigorous procedure than that taken in respect of voted ones, as the estimates—they are only estimates—are put forward for the vote by DWP or other Departments. At the end of the year, reconciliation for social security benefits is done on a sample basis to ensure that nothing has gone wrong overall. That does not match Inland Revenue's accounting system, which is necessarily more thorough, given the range of issues that it deals with, as it needs to track payments. 
 The Government have made it clear that Inland Revenue will account for all tax credit payments in the same way. At the time that a payment is made, the exact tax liability for that year will not be known. That can be determined only at the end of the year. It would not be possible to break down the payments into different parts and fund each part separately. Expenditure must be shown, and that now relates to how much was paid out in the tax credit. The Inland Revenue's care and management responsibilities and the way in which the Department operates make it necessary to identify expenditure on tax credits. 
 I envisage lots of questions, either now or over the coming months and years, about breakdowns of those figures, and I shall have to pay careful attention to that and be as helpful as possible to hon. Members. However, they will be able to see more clearly what is spent on tax credits, because they will see at the end of the year the actual amounts involved and how they fit into the overall budgets. However, the amount will also be dealt with as negative tax and will be deducted from tax receipts. I believe that that will give better and more transparent access to the exact expenditure on the tax credits. Although the hon. Member for Arundel and South Downs does not necessarily agree with how we account for that in the Red Book, I hope that he will appreciate that it is clearly shown. 
 The amendment is fundamentally flawed. I know how difficult it is to draft amendments, so I do not criticise the hon. Member for Arundel and South Downs for that, but I ask him to withdraw it on that basis. If he feels unable to do so, I shall have to ask my colleagues to oppose it.

Howard Flight: We have made our point, and we would not want an amendment to cut off necessary welfare funding. We are, therefore, in principle willing to withdraw the amendment. However, the Minister has not answered the question about part 95 of the
 European standards of accounting and whether it is legal to account for the money in this way, given that the Minister has confirmed that it will be agreed that the payments constitute welfare benefits.

Dawn Primarolo: I apologise for having left out that point. My understanding is that the proposal is in line, but I shall double-check, and if I have misled the Committee, I shall write to the hon. Gentleman and other Committee members describing exactly the interaction involved. However, my excellent officials inform me that we are correct.

Howard Flight: I thank the Minister for her comments. On that basis, I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn. 
 Clause 2 ordered to stand part of the Bill.

Clause 3 - Claims

Howard Flight: I beg to move amendment No. 58, in page 2, line 37, after 'Kingdom', insert
'and/or in the European Union'.

Jimmy Hood: With this it will be convenient to take the following amendments: No. 59, in page 2, line 38, after 'Kingdom', insert
'and/or in the European Union'.
 No. 60, in page 2, line 40, at end insert— 
'(2A) No person shall be entitled to a tax credit who is physically absent from the United Kingdom for more than 4 weeks in any one year.'.
 No. 5, in page 3, line 4, at end insert 
'and/or in the European Union'.

Howard Flight: Amendments Nos. 58 and 59 are probing amendments that relate to the issue raised by the first Liberal Democrat amendment, on which the Minister undertook to respond in full at this stage of the Bill's consideration.
 We should like clarification of the relationship between the new tax credit regime and the European Union, the position of EU citizens, and whether the Government intend essentially to limit the payment of credits to those who are physically present in the UK. My first question is whether EU nationals resident in the UK—who may pay lower rates of UK income tax than British nationals—will qualify for the tax credits in full. The second question, which is related, is what is the Government's proposed policy on other nationals, especially Commonwealth nationals, who reside and work in the UK. Is an obligation involved? I understand that that is the position under EU law. Are those obligations avoidable? About 725,000 individuals, who are not British nationals, working in the UK will qualify under one or other count for the tax credits. What is the position on reciprocity for any analogous benefits in other EU countries? Given the EU directives on benefits and EU accounting standards, how does the issue interrelate with that of whether we are dealing with a benefit or a tax item? Are the rules different depending on how tax credits are regarded or on whether they are correctly categorised? 
 I note that clause 38 grants the Government power to regulate in relation to immigration. We are, therefore, potentially covering some of the issues related to that. Amendment No. 60 is related, but different. The Minister will be aware that under the existing benefits regime there are problems with people returning to their families in the Indian sub-continent, for example, for substantial periods of time. In those cases, the amendment would restrict absences abroad on holiday to what any reader of The Sun—or even the Daily Mail—would regard generous: a four week maximum. That amendment is principled but would also probe to discover the Government's proposed policy.

Steve Webb: I understand the example that the hon. Member for Arundel and South Downs gave, but I am thinking of a different one. If a British citizen arrived back in the country in the middle of May, having missed six weeks of the tax year, he could be subject to destitution under amendment No. 60 because he would not receive any tax credits. That may be an unintended side effect.

Howard Flight: Later amendments would address that by abandoning the principle of the tax year, but the point is readily taken.

Steve Webb: I am grateful for the hon. Gentleman's gracious response. Rather than risk those later amendments not being debated in Committee, I am disinclined to support the current one.

Dawn Primarolo: I shall explain the function of the provisions at which the amendments are directed. This is the second debate we have had in this sitting about interaction with European law. Clause 3 provides that a person must be in the United Kingdom to make a claim for tax credits: that is a reasonable requirement. The purpose of tax credits is to support people who live in the UK. Equivalent rules operate for the working families tax credit, the disabled person's tax credit, the children's tax credit, income support and the jobseeker's allowance. Without such rules, anyone living anywhere in the world could claim tax credits, providing that they met the qualifying criteria. That might put a strain on the Exchequer, not to mention the pockets of UK taxpayers: we must have a reasonable limitation. Therefore, a person's entitlement to tax credits will cease from the point at which they leave the UK.
 I hope that you will permit me to look slightly ahead, Mr. Hood, because clause 5(3) states that a person's entitlement to tax credits ends if they leave the UK. It makes it clear that an award ends at any time when the person who made the claim can no longer make a claim under clause 3(2). As the hon. Member for Arundel and South Downs pointed out, the two provisions interrelate, because only a person in the UK can make a claim under clause 3, and it follows that the award ends when they leave the country. That is perfectly sensible. The new tax credits will be responsive: awards will change with people's circumstances. 
 However, it is not the Government's intention that a person's award should end because they go abroad 
 for a few days or weeks on holiday or because of family illness, whether to a European Union country or elsewhere. As the hon. Member for Northavon suggested, someone may have to return to another country for a period due to family illness but they are to all intents and purposes still resident in the UK, and their family remains here. 
 The clause allows regulations to be made that set out the circumstances in which a person may be treated as being in the UK. We intend those regulations to allow scope for people to retain their entitlement if they have to go abroad for a short period. An obvious scenario is that of someone who has to return to Pakistan or India because of a parent's illness and who might be out of the country for a slightly longer period. I am sure that hon. Members can think of other examples. The regulations will be designed to make the situation reasonable. To be eligible for tax credits, a person must be resident in the UK, but the regulations will be reasonable and sensible about circumstances in which for some reason in the course of a tax year, they may not be in the UK. 
 The amendments would enable people anywhere in the EU to claim a tax credit irrespective of whether they lived in the UK. However, only those who were physically present in the UK for all but four weeks of the year would be entitled to any tax credit for that year. With respect to the hon. Member for Arundel and South Downs, the Bill as drafted works in a much clearer, more sensible and straightforward fashion. I accept that he is seeking to probe the limits of the provisions. 
 I have said that we intend to make regulations to retain entitlement for those who go abroad temporarily. They will also mean that a person is not prevented from making a claim for a tax credit simply because they are temporarily out of the country. I think that that is the reverse of the point made by the hon. Member for Northavon in an intervention.

Richard Younger-Ross: Will the Minister expand the point slightly further and say whether someone who wanted to work abroad for a short period would lose their entitlement? We should consider labour mobility, and my part of the country has many seasonal workers, who benefit from moving abroad for short periods.

Dawn Primarolo: The issue is already addressed in the social security and tax systems. When is a person deemed no longer to be in the UK for the purposes of paying tax and national insurance? Some circumstances have been touched on, although I cannot see how they could come within the provision. For instance, there is a question about people who work on a North sea oil rig, but I think that they are paid rather generously. I do not want to be drawn into the question of tapers and rates, but I cannot see how such people would get into even the range that we are thinking about. I am trying to think of a relevant circumstance, but I honestly cannot think of one. Someone who works for an employer and is required to work for a certain number of months somewhere else in the world is still subject to United Kingdom tax and national insurance. Their place of
 employment and their family are, to all intents and purposes, still in the United Kingdom, and the temporary location of their work does not change their employer or their status as present in the United Kingdom. The regulations seek to address those issues. They do not seek to remove entitlement from those who are genuinely entitled to it, but will ensure that those who to all intents and purposes are not present in the United Kingdom will not find that they can qualify.
 European nationals who are resident in the United Kingdom will qualify for the tax credits provided that they meet the residence test for being in the United Kingdom, in the same way that everyone will have to provide information that they genuinely live here. That is what we do for WFTC and DPTC. Our approach is sensible, tried and tested.

James Clappison: Will the hon. Lady give way?

Dawn Primarolo: I will just address the next point. The hon. Member for Arundel and South Downs raised a question that related specifically to Commonwealth countries. Anyone who has ever looked at the E111 form will know that we have a vast array of varying degrees of reciprocal arrangements with countries throughout the world. I am not aware of any country where there could be a reciprocal arrangement on tax credits, but that is the basis on which they are negotiated. Other countries are interested in developing a reciprocal arrangement on tax credits.

James Clappison: I ask the Paymaster General to clarify one point. She has told us that EU citizens who are working in this country will be eligible for the tax credits, and that the provisions extend working credits in particular to those without children. Does it follow that EU citizens without children who work in this country will now be entitled to that credit? Will she indicate the numbers of people who might be new claimants?

Dawn Primarolo: They would have to be covered by the reciprocal arrangements in the regulation and would have to satisfy the criteria for eligibility. I understand that we have those arrangements with the European Union. If the hon. Gentleman were taken ill in Germany or France, he would have access to the national health services in those countries. That relates to the arrangements that are guided by the regulations and any additional reciprocal arrangements that we have with individual countries. We have sought through the regulations to remain within our international obligations but to ensure that the intent is that the person is resident in the UK. The requirements vary according to whether the provision is designated as a family benefit. When that debate is finally settled, we will be able to give an absolute answer. The principle is that it is supposed to benefit people who live and work in the United Kingdom, bearing in mind that in some circumstances, people may find themselves temporarily outside the United Kingdom.
 There are a number of other points to make in respect of the amendments. However, I will not detain the Committee if the hon. Member for Arundel and South Downs is simply seeking to probe the reciprocal arrangements. I will conclude my remarks later, and return to the more detailed points of why the amendment should be opposed only if the hon. Gentleman is attached to them. However, he may wish to withdraw them.

Howard Flight: The Minister's diagnosis is correct, as I have said. On several occasions, she referred to temporary absence. Will she say what that means in terms of potential period of time? Amendment No. 60, in particular, is designed to probe the length of that piece of string. The hon. Lady is aware that it is an area where there have been many problems in respect of social security benefits and prolonged temporary absences overseas. Therefore, members of the Committee need to know what the intended specific policy is, with regard to qualification of periods of time for temporary absence.

Dawn Primarolo: The question of temporary absence is one of exception. As I am sure the hon. Gentleman will agree, we are considering circumstances when it would be an exception that a person would be absent. Let us suppose that a person returned to their parents' home because one parent was terminally ill. It would be difficult to say to that person that, if his parent died within four weeks, he could return to his own home within the qualifying period, but if his parent did not die within four weeks, he would not get back in time. That person would lose his entitlement, even though his wife and family whom he normally lives with remained at their usual residence. Such a person might also have taken leave, and have a job to return to.
 I want to be able to consider what actually happens in genuine cases and to create sufficient room for manoeuvre. For example, child benefit allows eight weeks. I am not saying that we would definitely allow the same period. That is a matter for further consultation. We need to ensure that we do not introduce something that would be cruel, simply for the sake of having a cut-off point, when families find themselves in tragic circumstances. However, we have to protect the Exchequer and ensure that there is no abuse. I am happy to keep the hon. Member for Arundel and South Downs informed of how our thinking develops on the matter. If he is asking for a period of time, and if he promises not to take my response as the absolute answer, I would say that, as child benefit works well at eight weeks, that that would be a starting point for our consideration.

Howard Flight: I thank the Minister for her comments. She has answered the key points that the amendments are designed to raise. It is appropriate to note that EU citizens who come to work in the UK already enjoy—as far as I am aware—a preferential tax regime over native citizens, depending on how long they are working here. Admittedly, that may be relevant only to higher earners. However, a tab needs to be kept on the extent to which we might, unthinkingly, be creating a substantial tax incentive for people from the EU to
 come and work here. There is nothing wrong with that in principle, but it should have a justification of benefit to the country. The other issue is about the numbers of people potentially involved.
 The Minister has set out the legal position clearly. I thank her for her comments about what ''temporarily absent'' may mean, and I repeat the point that in the past the Department of Social Security has wasted a lot of time because of greyness of definition and, on occasions, attempts to milk the system by absences that are not due, for example, to a dying parent. It will save administrative time and costs if it can be as closely defined as reasonably possible. We do not want to pursue the amendments on their words, but to raise the issues. On the basis of the answers that I received, I beg to ask leave to withdraw the amendment. 
 Amendment, by leave, withdrawn.

Howard Flight: I beg to move amendment No. 4, in page 2, line 42, leave out from 'are' to end of line 45 and insert
'not separated under a court order'.

Jimmy Hood: With this, it will be convenient to take amendment No. 81, in page 2, line 42, leave out from 'are' to end of line 45 and insert
'members of the same household'.

Howard Flight: The paragraph to which the amendments refer follows an income tax definition that may work satisfactorily for the collection of tax but is unnecessarily woolly for the paying out of taxpayer's money to others in tax credits. What does the phrase ''likely to be permanent'' mean in relation to separation, and how will it be quantified? The definition as it stands provokes argument and debate. More specifically, how does the paragraph interrelate with the rest of clause 3(3), relating to couples? My point is that cohabitation fraud is endemic in any system that pays more to couples. It has been a nightmare to police in the past, and it would be more sensible to have a much clearer definition of when two people are a couple and when they are not. The amendment sticks with the clear legal definition that separation is only separation under a court order.
 The Liberal Democrat amendment No. 81 gets at the same point and tries to address it with a more specific definition than the current one, by using the phrase 
''members of the same household''.
 The current definition will be an encouragement to fraud and an almighty nightmare for the unfortunate staff in the Inland Revenue who have to administrate it and judge whether people's separations are permanent. It will lead to a relative worsening of the problems and a potential shambles.

Steve Webb: I will address amendment No. 81 and the consistency of the definition of marriage in the tax and social security system. The amendment uses the definition of marriage that appears in the State Pension Credit Bill and other parts of the social security system. Are the Government deliberately using a different definition of marriage for this Bill, and could problems arise if they continue to do so? For example, someone who is aged 64 and counts as
 married on one definition may find that, on applying for a pension credit on their 65th birthday—or whatever the relevant age—they are married one day and not the next, or vice versa. We want consistency. The Government say that they are attempting to streamline the provisions, so it will be interesting to find out why the two Bills adopt different definitions.
 A related aspect is that some people receiving tax credits will also receive social security benefits. Typically, an unemployed family will receive income support for the adults and child credit for the children. A social security based definition of marriage will apply to the income support element and a tax credits definition will apply to the tax element. If there is any difficulty between the two, where do we go? Under the social security arrangement, people can go to a social security appeal tribunal; under the tax credit arrangement, they go to the tax commissioners. So some people will appeal against the tax definition and go the tax commissioners; others will appeal against the social security definition and go to a social security appeal tribunal. What happens if there are inconsistencies? Why are different definitions employed, particularly as people make a transition from one tax credit to another as they hit a certain age? If the definition changes, strange things could happen to a couple's marital status overnight.

Dawn Primarolo: Amendments Nos. 4 and 81 deal with what constitutes a married couple for the purposes of tax credits. Clause 3 defines a married couple as a man and woman who are married and neither
''separated under a court order, nor separated in circumstances in which the separation is likely to be permanent.''
 That is a well-established definition, long used in the tax system. The same definition is used for the purposes of the children's tax credit and was previously used in establishing entitlement to the married couple's allowance—and hence to the additional personal allowance. 
 What we mean by 
''separated in circumstances in which the separation is likely to become permanent''
 is precisely that. It means what it says: the words carry their natural meaning, which is customary in the tax system. The test is long established and has been interpreted effectively over several years. As I said, the definition has general application in the tax system. It is also used in the calculation of capital gains and in the taxation of jointly held property. 
 To establish separation in the social security system, a legal document is necessary. A bizarre position could arise when a couple live at opposite ends of the country, but do not possess the requisite document. We need to assess whether that might cause difficulties. 
 Both amendments are designed to introduce a different definition for the purposes of tax credits. Each takes a rather different approach to the same question, which makes my case. We already have a definition that has worked well for years and the Revenue is able to apply it, whereas hon. Gentlemen have come up with two different ways of defining the same phenomenon that do not work as well. 
 I hope that the hon. Member for Arundel and South Downs will forgive me if I say that I find amendment No. 4 rather odd. It would require a married couple to be treated as a couple for tax credit purposes, even after they had separated permanently. An estranged couple who led entirely separate lives, possibly at opposite ends of the country, would be obliged to make a joint claim to tax credits and their award would be based on their combined income until they had obtained a court order confirming separation. I see no need to drive couples to court when the facts demonstrate what has occurred: that has operated perfectly well in the tax system in the past. 
 I am sure that the hon. Member for Arundel and South Downs will explain how scallywags try and manipulate the tax system, but I remind him that we cannot make legislation assuming that everyone is a scallywag or a cheat. Perhaps that is a reflection of our different political starting points: we believe that people are good, honest and entitled to their rights. We must ensure that the system has enough safeguards.

Howard Flight: Of those children's tax credits sampled by the Inland Revenue, about 30 per cent. were wrong. A lack of legal clarity opens the door to problems. Co-habitation has been an area of notorious problems, and there is a case for a more specific legal definition.

Dawn Primarolo: I do not agree with the hon. Gentleman. Given the household structure for millions of people in this country, I would be intrigued to see him table a Finance Bill amendment to entitle people to be legally treated only if they have a legal document of separation. If he asked me whether I could guarantee that people will not try to cheat the system, I would reply that in nearly 5 years as a tax Minister—seven if I include my years as a shadow Minister—I have discovered that some people behave outrageously. We do our best to check them.
 The current definition works perfectly well. I understand the intention behind the hon. Gentleman's amendment, but people's personal and legal arrangements would be tax-driven. That is not appropriate if we can rely on the facts. Tax credits direct support to people according to their circumstances and responsibilities. The amendment would prevent that, requiring instead that awards be based on the legal status of a relationship, which is wholly inappropriate for many people. We will debate other safeguards and the methods of checking the system. Those who are determined to cheat the system will do so wherever they can.

Hugo Swire: Is it the case that the Revenue intends to investigate 1.5 per cent of applications for tax credit? If that is the case, how is that figure arrived at?

Dawn Primarolo: The hon. Gentleman is again dealing with a later clause. One of the problems in developing an anti-fraud strategy is that if one announces it in a Committee in the House of Commons, it is not much good. We will have a more
 detailed debate about how the Inland Revenue will undertake its risk assessment and monitor procedures, penalties and any criminal offences for which investigators would recommend prosecution. He touches on the important question of how we monitor and what the risk assessments are to ensure that we keep downward pressure on the points where the scallywags may try to exploit the system. I would be more than happy to return to that debate at that time.
 Amendment No. 81 is an entirely different kettle of fish. It seeks to recast the definition of married couple to replicate the definition in section 137(1) of the Social Security Contributions and Benefits Act 1992, which looks at whether a married couple are members of the same household. It is obviously a thoughtful amendment that seeks to ensure the same use across the entire system. I understand why the hon. Member for Northavon has tabled it. I considered carefully what was the most sensible way forward. On balance, I believe that it would not be appropriate to adopt the approach proposed in the amendment. The question of when a married couple should be treated as a couple arises in the tax and the tax credits system, as well as the social security system. In both we are concerned to establish whether a married couple really do arrange their lives as a couple, rather than continuing to treat them as a couple even though they have separated. 
 The technical definitions used differ slightly. I revisited this when I saw the hon. Gentleman's amendment, and I am sure that the effect is the same in terms of how households are treated. In setting a definition for the purposes of the new tax credit there is a choice between following the social security approach and the tax approach. I do not share his view that we should follow the social security system. The definition used in the Bill is the same as the definition in the tax system and it operates in particular for income tax reliefs. It is widely understood, straightforward and has been in use of many years. I am not convinced that we should use a definition from somewhere else and give up a system that is working very well. There is no overwhelming case to move the definition.

Steve Webb: I suppose the distinction is that quite a few people who get the tax credits, unusually relative to a lot of taxpayers, are also benefit recipients. For example, every family with children on income support will receive social security benefit with one definition of marriage, and a tax credit with a different definition of marriage. I can understand that for the rich, consistency with the benefit system is much less of an issue, but many people go through two different systems with two different definitions simultaneously. When there is a conflict between the two there is a question of where they appeal.

Dawn Primarolo: It comes back to our debate on passporting. I was asked then whether someone on income support would have to apply in lots of different places. I said that they would not; even though it was administered by different organisations, there would be one point of contact. Someone who was in receipt of income support or jobseeker's
 allowance would automatically move to a maximum child tax credit. There is not a double application.
 The hon. Gentleman asked why the State Pension Credit Bill is different. There is a fine judgment about which definition to use. I approached the issue on the basis of, ''If it's not broken, why fix it?'' I do not think that that is the right why to say it, but hon. Members know what I mean. The definition has worked well in relation to children's tax credit and everyone understands it, so there is no reason to change it. For both Bills, we considered whether a married couple really live together as a couple. For unmarried couples, both Bills take the same approach and consider whether the couple live together as husband and wife. 
 The Tax Credits Bill replaces the minimum income guarantee, but remains in the social security system. The premise of the State Pension Credit Bill was presumably the same: the definition already worked and there was no reason to change it. As I understand it, the hon. Gentleman's point concerned the overlap and whether someone could find themselves qualifying for one and not the other. We discussed that quite a lot, and we could think of no scenarios because of the way in which the two systems operate. Apart from the theoretical example, I cannot think of a real-life experience where that might occur. For all those reasons, in the end I played safe and stuck with the definition that works. 
 As the hon. Members for Northavon and for Arundel and South Downs and other hon. Members regularly point out, the Bill makes several changes, but we should not make a change and risk something where that is unnecessary. That is why we went for the definition. We believe that it works most effectively. We do not believe that there will be any difficulties, and cannot find any. However, if there were any such difficulties, that would be a matter for regulation. I have tried to explain fully every point raised this morning, and I hope that the hon. Member for Arundel and South Downs will agree to withdraw his amendment. If he cannot, I will ask my hon. Friends to vote against it.

Steve Webb: I do not want to go over the same ground, and you would not allow me to do so, Mr. Hood. However, the Minister said, ''If it's not broken, why fix it?'' I do not mean it pejoratively when I say that the Government are breaking it by splitting a single payment made through the social security system into a social security benefit and a tax credit with different definitions. It was not broken before. One payment was made under the social security legislation; one payment of income support for children was one social security payment. We are going down two separate avenues at the same time.

Dawn Primarolo: We are prepared to make a change where we believe that it will improve the system. I do not intend to go back over earlier discussions in relation to clauses 1 and 2, but the Government's clear objective on tax credits is part of the anti-poverty strategy. That is the most effective way to deal with the in-work, out-of-work divide and to get support to children. We did not make the change for the sake of it. When I used the phrase, ''If
 it's not broken, why fix it?'' I was trying to say that, in my experience, what worked was making additions and improvements, which the Bill does.

Steve Webb: I did not doubt that the Minister hoped to improve the system by making the change. It would have been reassuring if she had said that she stressed to her colleagues at the Department for Work and Pensions the advantage of moving to her definition for consistency and for the transition to retirement.
 My only point that the Minister did not address was the issue of appeals. People will be under two separate systems; they may appeal to social security or to the tax commissioners. Perhaps the issue will arise again.

Dawn Primarolo: I apologise for not dealing with the question of appeals. The hon. Gentleman is right in saying that those who sit on the appeals tribunals must have the expertise to adjudicate the matter. The issue arises with working families tax credit.
 I will confirm this in writing, but I believe that the point at which the appeal will be heard will be the same, because of the commonality of some of the points. I will double check, as the arrangements are transitional. However, we must ensure that the appeals tribunal has the skills necessary to deal with the issues.

Steve Webb: I am grateful for the Minister's response. She made an important point about a unified appeal system. A tax credits decision about marriage, for example, might have implications for social security entitlement. I would be grateful if the Minister would come back to us on that question.

Howard Flight: The Minister has persuaded me of her case, but I am sure that it is on the basis that she will support some of our subsequent amendments, which tighten up the legislation. I asked how the clause interrelates with the next one, in which the cohabitation problem is more complicated when dealing with unmarried couples. Defining when an unmarried couple cease to be a couple is also a difficult issue. Making the separation legal does not particularly help, although it provides some clarification. On the basis of the Minister's response, I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn.

Howard Flight: I beg to move amendment No. 7, in page 3, line 4, at end insert—
'(5A) Entitlement to a tax credit is dependent upon being lawfully in the United Kingdom; the Board shall have access to any information held in any form by any other Government Department for the purpose of satisfying itself whether a tax credit is properly payable under the provisions of this subsection.'.
 The amendment is one of several that we drew up to help the authorities in their investigations. It would provide for the exchange of information among Government Departments for the purposes of checking eligibility. The Bill defines eligibility in detail, but the process of checking it will not be easy. Access to other Departments' records would be of use to the Inland Revenue for making checks or for sampling for accuracy. The amendment is designed to add clarification and to probe the Government's intentions.

Dawn Primarolo: The amendment proposes that entitlement to tax credit should be conditional on the claimant being lawfully in the United Kingdom. The Committee will be reassured to hear that the Government do not intend to make tax credits available to people who are here unlawfully. However, it is not necessary to amend the Bill to achieve that result.
 The Bill already allows regulations to be made excluding persons subject to immigration control from entitlement to both the working tax credit and the child tax credit. This is a complicated area. It depends on the status of the person subject to immigration control. The hon. Member for Arundel and South Downs is no doubt aware that a person requiring leave to enter or remain in the United Kingdom but who does not have it—that is, a person here unlawfully—falls within the category of persons subject to immigration control. That is made clear in section 115(9) of the Immigration and Asylum Act 1999, to which clause 38 refers. 
 The first limb of the proposed new section is not necessary. It has been covered. It is cross-referenced in immigration law and there is provision for regulations to specify. The second limb would give the board access to information held for any purpose by other Government Departments to enable it to establish whether a person should be excluded from entitlement on the grounds of being in the United Kingdom unlawfully. I hazard a guess that I would not get an amendment that would give the Inland Revenue such wide powers to access information in any Government Department in the interests of deciding entitlement through the House of Commons let alone the House of Lords. The hon. Gentleman is familiar with the important balance that we strike in the tax system on taxpayer confidentiality, the existence of information gateways and their tight control. It was the subject of discussion on a recent Bill, which completed its passage just before Christmas. The issue of where the Revenue should have powers was hotly contested. 
 I assure the hon. Gentleman that the Government share his concern that the Revenue should have the information it requires to make correct decisions about a claimant's entitlement. I am not convinced that we need such vast powers to do so. It is not the Inland Revenue's role to police the immigration laws. Its role is to ensure that the rules for entitlement to tax credits are met. As I mentioned, those rules will include rules on entitlement for those subject to immigration control. The provision is in clause 38. 
 For the new tax credits, the procedure will be the same as for the working families tax credit, where the Revenue determines entitlement without direct access to the information held by the Home Office. I have decided that a regulatory power is necessary here because discussions are taking place at the Home Office about immigration and asylum and methods for ensuring that someone is here legally and therefore receives their legal entitlement. It is not a sensible approach to include provisions that may change and may necessitate a return to primary legislation. The regulations will replicate the interaction that occurs now on the working families tax credit. 
 I am grateful to Opposition Members for tabling the amendment, which raises an important point. I am sure, however, that the hon. Member for Arundel and South Downs will agree that it is not the Committee's role to make the Inland Revenue responsible for all Government policy, including immigration controls. We need to follow the immigration policy laid down in legislation. The information gateways proposed by the hon. Gentleman are much wider than we need and would concern all citizens in this country. Nevertheless, he raises an important point to which I am sure that he will return: ensuring that only those who are eligible will receive the tax credits. I hope that he accepts that the cross-reference to the immigration laws and status give us the necessary powers.

Howard Flight: In simple terms, under the powers proposed in the regulations, can the Inland Revenue check with the immigration department if it suspects that a claim is from someone who is not lawfully resident in the UK?

Dawn Primarolo: One issue that might be considered, along with immigration controls, is whether an individual who has entered the country has applied for and been allocated a national insurance number.
 I think that we would not ask the Home Office directly, but the tax department can use its information to cross-check whether a person exists and other checks may be made elsewhere in the tax system to reinforce that. We are prohibited from disclosing taxpayers' information to the Home Office, but there are ways of cross-referencing. The Inland Revenue has the same problem as other Departments: someone who is here illegally will not be in the system and the Home Office will not know about them either. Information gateways to the Home Office will therefore not resolve the illegality issue. The only question is whether such people were subject to immigration controls; there are other ways of checking an individual's documentation. 
 On that basis, we can deal with the matters raised by the hon. Gentleman without extending the Inland Revenue's powers, which would probably frighten the living daylights out of honest taxpayers, who would worry about whether we were disclosing information. On reflection, he may wish to ask leave to withdraw the amendment, as it is unnecessary.

Howard Flight: I thank the Minister for her response. I would not wish to extend powers more than is justified and therefore to reduce privacy. The Minister has answered the probing question underlying my proposal. I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn. 
 Clause 3 ordered to stand part of the Bill.

Clause 4 - Claims: supplementary

Howard Flight: I beg to move amendment No. 8, in clause 4, page 3, line 10, after 'manner', insert
'before an official of the Board who is satisfied that all facts necessary to establish the claim have been made out'.

Jimmy Hood: With this we may take amendment No. 13, in clause 4, page 3, line 23, at end insert
'provided that such person has appeared before an official of the Board, who is satisfied as to the identity of such person and of the claimant and that the such person acts genuinely for the claimant.'.

Howard Flight: The amendment, which would require a claimant or someone acting for him to meet an official to provide information to establish the claim, is a helpful, anti-fraud measure, as the rules and complexity even of child tax credits are considerable. It is unrealistic to believe that many people will easily be able to understand the forms, no matter how well they are devised. The Government cannot be wholly happy with the take-up even of the existing child tax credit. The amendment would help people to find out what they are entitled to claim and assist those who need it. In the context of some pretty tortuous arrangements for claims based on this year's or last year's income and whether hours worked relate to this year or last year, the amendments would also afford an opportunity upfront to iron out a lot of issues. People could be helped and advised about what they are entitled to and the Revenue would have an opportunity to ask questions. Obviously, it might discover from an interview that a claim is not justified.
 I appreciate that there would be an administrative-time cost. Interviews would have to be conducted locally, which would presumably involve Revenue staff and so on. However, the interview model that the Government introduced in a number of areas has been quite successful, and the model of people going to the DWP to find out what they are entitled to is well established. Therefore, there is logic behind these two parallel amendments, which would make the system work better, help individuals and provide a mechanism to reduce fraud.

Dawn Primarolo: Amendments Nos. 8 and 13 concern the consideration of claims by the Inland Revenue. Amendment No. 8 would introduce the requirement that a claim be made
''before an official of the Board who is satisfied that all facts necessary to establish the claim have been made out''.
 Amendment No. 13 would have two effects. First, it would require any person acting for another in making a claim for a tax credit to appear in person before an official of the board. Secondly, it would require that official to satisfy himself as to the identity of that person and the claimant and to be sure that the person was acting genuinely for the claimant. 
 I shall deal first with the requirement for the Inland Revenue to give proper consideration to the claims that it receives and to satisfy itself that they are valid. It is unnecessary to amend the Bill in that regard. Clause 14 makes it clear that, on a claim for a tax credit, the board—in practice, a Revenue staff member—is required to take a decision about whether to make an award. It is therefore incumbent on the Revenue to consider each claim that is made. I assure the Committee that the Revenue will need to satisfy itself before paying a credit as to the identity of the claimant and any person acting on their behalf and that the relationship between the two is genuine. The 
 Bill does not need to be amended to ensure that that occurs. 
 More generally, the board's statutory responsibility for the proper administration of tax credits is covered in clause 2. Clause 4(1)(a) enables regulations to require that claims be made in a prescribed manner. I assure the Committee that the prescribed manner will be such that the facts necessary to establish a claim must be provided. If they are not, the claim will not be valid and no award will be made. Nothing more is needed in the Bill. 
 The amendments can be read as requiring claimants and appointees to attend personal interviews with an official of the board. I am sure that the proposal is well intentioned, but it is also, if hon. Members will forgive me for saying so, slightly misguided. Such a requirement would be completely impractical; we are talking about 6 million applications. We do not require everyone who wants to claim a tax relief to appear in person before a staff member so that they can ascertain whether they are entitled to it. Why do we need different treatments within a system that already works perfectly well? It would be completely impractical, and not just for Inland Revenue. Think of the problems involved for the people trying to make a claim. When we are supposed to be moving to e-commerce and interaction to ensure easy access, the official Opposition want everybody to trudge into a tax office in person to ascertain the right to access.

Hugo Swire: The Minister asks why we should reorder a system that works ''perfectly well'', but does ''perfectly well'' mean the swindling of about £350 million a year from the tax credit system? Does she regard that as working well?

Dawn Primarolo: With respect, I would need to look at the exact figures that the hon. Gentleman is quoting, as I do not recognise them. It is true that people try to swindle the tax system. It is a very interesting issue at the moment, although I will not digress. Self-assessments are being sent in at the moment, and they give an interesting perspective on people's attitudes. Unfortunately fraud is a fact of life. The amendments are to determine whether we have proper procedures in place and whether they will improve. Somehow, the official Opposition seem to take the view that if people are at the tax office in person, they are less likely to commit an offence. I do not believe that. It is not necessary for them to do that.
 We have heard about the costs, and suggestions that the proposal is totally unnecessary, utterly disproportionate and far from clear. There would be a lot of sweeping requirements and we would need to employ more staff. The staff we use to track down fraud would be too busy interviewing people about their application forms. 
 The hon. Member for Arundel and South Downs made another point, which we can return to during the appropriate clauses, about people being aware of their rights and proper communication. He raised questions about the form and how we ensure that the take-up is at the correct level. I will not go any further down that route, because I do not want to try hon. Members' 
 patience, and I will be able to return to the issue anyway. 
 If the hon. Gentleman compares the take-up in the first year of family tax credit with the take-up in the first year of working families tax credit, he is not on thin ice: he is actually in the water and out of order in criticising the take-up of WFTC. On the question of applying all appointees—

James Clappison: In order for the Minister to sustain the proposition she has just made, perhaps she could tell us how many people are eligible for working families tax credit.

Dawn Primarolo: Oh dear. I thought the hon. Gentleman might actually make a good point. The take-up of working families tax credit in its first year was 76 per cent. which is close to the 81 per cent. take-up of family credit in its final year and much higher than the figure for its first year, which was only around 60 per cent. We should stop flogging a dead horse and move on. Given that working families tax credit is widely celebrated and greatly appreciated by those who receive it, and it has helped endless numbers of families, perhaps we can move on.
 I return to the requirement that all appointees attend an interview with a member of Inland Revenue staff. A blanket requirement of that sort would be disproportionate and ineffective. The acceptance of claims made by an appointee on behalf of other claimants is nothing new. It happens now with working families tax credit and a range of social security benefits. Our intention is to allow those arrangements to continue when the new tax credits are introduced. Clearly, they are buttressed by arrangements that are already in force. We will discuss the penalty and investigation powers later. 
 The most effective way of tackling fraud is not to impose indiscriminate requirements for people to attend interviews, but to use systematic risk assessment techniques to identify the cases that carry the greatest risk. We must ensure that how we pay people their entitlements is open to minimal fraud, misuse and direction to other individuals. That is covered in the Bill. 
 I ask the hon. Member for Arundel and South Downs to withdraw the amendment, but if he wants to vote on placing such a huge burden on the Inland Revenue, I will ask my colleagues to oppose it. I look forward to seeing his estimate of how much it would cost if Opposition Members were foolish enough to think that they could achieve what is suggested in the amendment.

James Clappison: Before my hon. Friend the Member for Arundel and South Downs responds to the Minister's comments, I will take issue with some of her points. Her response was in many ways understandable and not unexpected, but I am not sure that she did justice to the principle that lies behind the amendment. I do not accept the view, which seemed implicit in her response, that a personal interview does not do any good in tackling fraud. That is not in keeping with other Government policy,
 in which they postulate the benefits of interviews. For example, the Government require applicants to have job-focused interviews, although that is in a different context and not necessarily to deal with fraud. There are benefits in seeing someone in person, and in that context, Mr. Wray—

Jimmy Hood: Order. To be helpful to the hon. Gentleman, the Chairman's name is Mr. Hood.

James Clappison: I have got off to a bad start. I beg your pardon, Mr. Hood. I will need a personal interview for that.
 There would be benefits in having an interview in this context. The prospect of one may deter someone who is minded to commit fraud from setting out on that course. It may result in the person who carries out the interview having the feeling that something is not right and forming a suspicion that they would not have formed from just looking at the papers.

Dawn Primarolo: Scientific analysis.

James Clappison: We will come to that in a minute.
 The other benefits would be for the honest applicant. We are putting in place a system that many people believe will be more complicated on changes of income. Applicants will be required to do a great deal, including monitoring their income and changes in circumstance, and many may find it helpful to have a personal interview.

Hugo Swire: Does my hon. Friend remember that, according to a report in The Economist last year on the working families tax credit, only one in 10 tax inspectors could fill in the application form correctly?

James Clappison: That is an important point, and we are now moving to a system that the Institute for Fiscal Studies has said will place more requirements on the applicants. They will have to monitor their income and changes during the year, which might be a substantial burden for many people.
 The Minister spoke about clause 14 and the requirement that the board must examine and be satisfied with claims. Will she tell us whether that clause makes it possible for the board to require people to come in for personal interviews? If so, how many cases will there be and under what criteria will that apply?

Dawn Primarolo: I am not saying that personal interviews are not in order if risk assessment indicates that they are necessary for more rigorous consideration. I was rejecting the idea that we should have 5 million. We do not call in every taxpayer to claim their relief, so why should we have interviews in this context?

James Clappison: Will the Minister, perhaps after receiving some advice, estimate in how many cases and in what circumstances such interviews will apply? There are benefits in seeing somebody in person. Our justice system operates on the basis of people having to give evidence in person rather than just making a written statement. We hope that the Minister will be careful about fraud. Although her response is not entirely unexpected, I hope that she understands that
 we are concerned that every possible way of combating fraud be adopted in the Bill.

Howard Flight: The Minister will know that the institution of interviews was introduced in the fast-track winding up of people's estates, which has been a successful experience.
 It being One o'clock, The Chairman adjourned the Committee without Question put, pursuant to the Standing Order. 
 Adjourned till this day at half-past Four o'clock.